Chipotle downgraded, Cheesecake Factory upgraded at Wedbush
Wedbush's recent note gave ratings on several stocks in the food industry, including Cava (CAVA), Chipotle (CMG), and The Cheesecake Factory (CAKE). Cava was upgraded to "outperform" from "neutral" and the stock's price target was raised to $48 from $35. Chipotle was downgraded to "neutral" from "outperform," but its price target was raised to $2,400 from $2,200. The Cheesecake Factory was upgraded to "outperform" from "neutral" and received a raised price target to $40 from $34. Wedbush Securities Managing Director Nick Setyan joins Yahoo Finance to discuss Chipotle and The Cheesecake Factory's ratings. "If you think about fast, casual Chipotle ... Wendy's (WEN), McDonald's (MCD), et cetera, they're a direct grocery competitor because they're ... a direct meal replacement, as opposed to like a full service restaurant, which is more of a social, group occasion," Setyan explains. "On the margin, grocery becomes more competitive. On the margin again, there's gonna be some share shift." "The difference between, say a Cheesecake Factory, which is a full service, and ... Chipotle, is that expectations are actually really low going into 2024 because casual dining's been such a laggard for so long," Setyan says. All The Cheesecake Factory "needs to do is perform in line with expectations given where valuations are." Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
